Question

The following comparative income statement (in thousands of dollars) for two recent fiscal years was adapted from the annual report of Speedway Motorsports, Inc., owner and operator of several major motor speedways, such as the Atlanta, Texas, and Las Vegas Motor Speedways.

				Current Year			Previous Year
Revenues:
	Admissions			$78,332			$86,949
	Event-related revenue			140,210			133,632
	NASCAR broadcasting revenue			216,592			209,155
	Other operating revenue			26,780			28,622
		Total revenues		$461,914			$458,358
Expenses and other:
	Direct expense of events			$101,876			$98,973
	NASCAR event management fees			123,212			119,101
	Other direct operating expenses			18,502			18,782
	General and administrative			164,949			177,132
		Total expenses and other		$408,539			$413,988
Income from continuing operations				$53,375			$44,370

a. Prepare a comparative income statement for these two years in vertical form, stating each item as a percent of revenues. Enter all amounts as positive numbers. (Note: Due to rounding, amounts may not total 100%).

b. Overall revenue __________ some between the two years, accompanied by a slight change in the overall mix of revenue sources. The NASCAR broadcasting revenue _________ by 1.3% of total revenue, while event-related revenue _____________ by 1.2% of total revenue. NASCAR event management fees, ___________ by 0.7% of total revenue. General and administrative expenses, however, _____________ by over 2.9% of total revenue. It appears that _____________ has helped the company significantly improve its income from continuing operations.

Answer 1

Comparative Income Statement (in thousands of dollars)
For the Years Ended December 31
	Current Year amount	Current Year Percent	Previous Year Amount	Previous Year Percent
Revenues:
Admissions	78332	17.0%	86949	19.0%
Event-related revenue	140210	30.4%	133632	29.2%
NASCAR broadcasting revenue	216592	46.9%	209155	45.6%
Other operating revenue	26780	5.8%	28622	6.2%
Total revenue	461914	100.0%	458358	100.0%
Expenses and other:
Direct expense of events	101876	22.1%	98973	21.6%
NASCAR event management fees	123212	26.7%	119101	26.0%
Other direct expenses	18502	4.0%	18782	4.1%
General and administrative	164949	35.7%	177132	38.6%
Total expenses and other	408539	88.4%	413988	90.3%
Income from continuing operations	53375	11.6%	44370	9.7%
b
Overall revenue increased some between the two years, accompanied by a slight change in the overall mix of revenue sources. The NASCAR broadcasting revenue increased by 1.3% of total revenue, while event-related revenue decreased by 1.2% of total revenue. NASCAR event management fees, increased by 0.7% of total revenue. General and administrative expenses, however, decreased by over 2.9% of total revenue. It appears that aggressive cost cutting has helped the company significantly improve its income from continuing operations.